tv [untitled] May 29, 2012 11:00am-11:30am EDT
technology so i can now talk about economics. now seriously i'll go back to technology in a minute. but that's the point. as susan said, the various sources of health care cost growth that people have attributed over the years are not severable, and in particular, they all have their root in the either the supply of something, or the demand for something, and since it's a market economy, it means money. and in this particular case, it's both supply and demand. so, anyway, here's -- here's something that i found in someone else's presentation. i found that it was very interesting. this does reflect the march of cost of connect nothing, and of course the march of progress. you know the traditional
technology, which it's not clear that that's really traditional. the real traditional technology, of course, is something the cave man did. so this is really kind of advanced stuff. since about 1910 or so. but, you know, we'll take it. and you can see that over time we've gone to more and more sophisticated equipment. and every time there's a new generation in equipment it seems as if the cost is higher now. but i can't tell you for sure is whether this is in price adjusted terms. but it probably doesn't matter. i think the impression is undoubtedly correct. but it's -- you know, when people talk about technology, they usually think about pieces of equipment. of course it's not just pieces of equipment. it's essentially everything that a doctor does. i mentioned drugs. obviously that's part of technology. equipment is part of technology. not just the equipment that is, you know, in the hospital up against a wall, some big thing.
but also the little things. the stethoscopes work a lot better these days to pick on the thing that i mentioned that marcus wellby had. but also, it's medical technique, and i think that's part of technology, too.by had. but also, it's medical technique, and i think that's part of technology, too. it's knowing how to do something, even if the basic materials are the same as they were 20 years ago, but you now know how to do it. that is an advance in technology. and all of that adds to both the supply of services that are available to treat disease, and diagnose disease, and also the demand for such diagnoses and treatments. now, one of the things that you'll see in the literature, which i've never particularly found useful. i'm an old labor economist at heart, but technology, you'll see these studies that try to parse out how much of cost is
accountable for by various kinds of factors. including technology. and technology is that -- is that one thing that can't be directly measured. although i argue that the other factors that people usually point to aren't really all that measurable, either. everybody admits the technology is not directly measurable. and so technology is usually treated as the residual. so, it's not technology. it's the i don't know factor. so if you see somebody say, technology is responsible for 60% of cost growth over some period of time. maybe. maybe not. it's just not at all clear. and technology alone, as susan said, technology alone is not the culprit. it's everything. but in the end, if there wasn't money to buy it and if people didn't want it and if doctors weren't prepared to do it, then that piece of technology wouldn't be used. so, it's more complicated than,
i think, most studies are capable -- most empirical studies are capable of dealing. okay. so, when you have better technology, you generally have better care. not uniformly. but over the vast span of time, we see this to be the case. and my example is cataract surgery. there's some evidence that a crude form of cataract surgery, it was literally somebody sticking a -- putting a stick in your eye, was practiced some time in the babylonian era. but more concrete evidence. there's some evidence in the 16th century of something called couching, which is essentially sticking a fancy stick in your eye. that didn't work too well. probably wasn't used very often. and, of course, there wasn't anesthesia at that time, so you had to really want to do it. in the '60s, you know, there's hundreds of years later, vast
improvement. in in-patient operation, we've learned something about infection, so in the '60s, we were far more capable of dealing with infection. that was a technological improvement. but it was risky. this was the kind of thing that you used a sharp knife, probably sharper than you're likely to find on the streets of washington any evening, probably a little smaller. but it's the same basic principle. and essentially, because it was so risky, very few patients ever got it. it was always reserved for those patients who literally couldn't see out of that eye. often only had one operation. and the idea was to extract the lens, and after the operation, which was highly risky, they sewed things up, and then the patient was held in the hospital room for at least two weeks with sandbags so they wouldn't move. very uncomfortable.
not so many patients were willing to try it. and those who were willing to try it were absolutely at the end of their ropes. that was -- that wasn't that long ago. so then we moved to today, and i'm not sure when today started. probably sometime in the last 15 to 20 years. we have a much more sophisticated procedure. people -- doctors are looking through microscopes to make sure that they're cutting exactly in the right place. they're using more sophisticated procedure to take care of the lens. they replace the lens with something that makes you see better than you ever saw in your life. and even better, if you're a medicare patient, which only the unfortunate few don't make it to medicare before this happens, but if you are a medicare patient, they pick you up, give you lunch, zap out an eye, two weeks later they do the same thing. so it's a different program. the fact is, that better technology is generally consistent with more successful
results, and if we have something that works better, you generate greater demand, and of course, although the price might be lower on a per-patient case, you generally generate more spending. and there's no guarantee, by the way, that the price will be lower. because of the weird way that we price things, which was certainly actually not all that well-explained the last time. but i'm going to claim that it was. okay so overuse, underuse, misuse. these are the terms that everybody hears. and great example has to do with treating coronary disease. this is from a paper by amatop chandra and john skinner. they classify actually using another study from somebody else, they classified different kinds of treatments according to their cost effectiveness and their cost. you can see the way they did the classification, and i'm sure anybody can have ample reasons
to argue one way or another on any specific intervention, but i think the overall sort of pattern here is interesting. that effective low-cost treatments were, according to them, accountable for more than half of the mortality decline due to coronary disease between 1980 and 2000. and of course, they didn't have the guts to say that anything was actually not cost effective. but less cost effective, and probably there wasn't anything that wasn't effective in a sense, and the word cost, i think, is probably an issue here. but you can see that, according to their categorization, the more aggressive treatments, stents, cardiac rehab, they're much more expensive than aspirin, for example. they account for maybe 19% of the mortality decline. now you want to be a little careful about this kind of a display. because you have to ask yourself something that they didn't ask
themselves in the paper. which is, what was the condition of the patient? somebody who really needed a cavage, you could shove an awful lot of aspirin in to their mouth on the way to the morgue. it's not all clear, this is in fact a kind of residual study. it's not very reliable, either. but it does say something about our use of services and it does imply something about the economic incentives associated with the complicated things. aspirin, who makes money off of that? not even the drug companies. carveages? who makes money off of that? you know who they are. so, that's something to think about. nonetheless, were you turn this down? would you go back to marcus welby's day, where they had heard about infection, but basically couldn't do much. no, of course not. because the fact is that we want all of those things and i'm
still sore at greg because he hasn't given me the drug that's really going to help me. but i'll give you until 2:00. okay, so, what about evidence? can we find out about evidence? okay, so here's the study from elliot fisher looking at regional variations in medical spending. and this is in the -- this is an index called the end of life expand your index. so these are medicare patients at the end of their life. i didn't read the article close enough to know how close to the end of their life they were, but you knew they were, so pretty close. and look at the distribution of tests and procedures that were done on people close to the end of their life. and lo and behold what do you see? very few major procedures. quite a few more minor procedures. but a lot of imaging, tests, evaluation, and management. that's where the money is.
for the very sick people. and obviously that's where the money is for the not very sick people. it's not in those -- i mean there's plenty of money in those fancy machines, don't get me wrong. but where is the real through-put? it's in the seemingly ordinary interventions that we're all used to and expect. that's where the money is. okay. so, well, everybody says well let's do some effectiveness research and you know, figure out what we really should be doing and don't do the things we shouldn't be doing. the only problem is that there are an oufl lot of things that we do, and there are very few studies looking at what we should be doing, and i don't care whether you look at the stimulus funding and the billions of dollars that are going into other places the research can't move fast enough, you can't spend enough money, you'll never get ahead of it,
because things that we accept for granted we do without question. and occasionally, when we question it, such as the on and off-again discussion about the blood test for prostate disease, we get a lot of resistance. because, that's not the way we do it. >> back live now at the kaiser family foundation. a health care discussion today. officials in just a few minutes from the centers for medicare and medicaid services, the aarp, and some health care researchers talking about the medical costs, and the causes of rising health care costs. live coverage here this morning on c-span3.
>> if you'd like to take your seats now, we'll try to get started, and have time for your discussion. and once again, waiting for this discussion to get back under way here. before it does, a quick reminder that coming up tonight right here on c-span3, we have american history tv in prime-time. all this week doing some special programming. tonight looking back at world war ii. starting at 8:00 eastern tonight, we'll be reporting on sense orship during the wore.
looks like this event is back live. our coverage continues on c-span3. >> health spending growth and still get us the other things that we want out of health care. so just to briefly recap what we've heard so far this morning. first of all, we heard from joe antos that technology is a factor both in terms of a supply of and demand for it. there has been some discussion about whether technology can directly be measured as a contributor to health costs. often it's not, and is treated, as he said, as a residual. it's the i don't know factor. if i can't explain it by other -- for other reasons, i call it technology. nonetheless, as he pointed out, we can clearly see the role of technology, he gave a number of those historical examples of how technology has evolved over time. he offered a list of some -- a menu of some options, some of which he thought had some
possible workability attached to them, and others in which he was a little bit dubious about. one of those was comparative effectiveness research. but that notwithstanding, there's a lot that we can do even within some of the constraints that exist, for example, in terms of the medicare program. he mentioned coverage with evidence development, notwithstanding the fact that medicare is, as he said, a political program, some of these changes could be made, or could -- or some of these tools could be used more effectively than they are now, and that there at least is some prospect of reining in some aspect of technology-driven health spending growth that we don't want and don't need. we then heard from ken thorpe about how it now looks as if 60% of the spending growth over the last couple of decades has been attributable to the growing treated prevalence of chronic disease. much of this, as he said, is driven by rising obesity. whether it's diabetes or
other -- or cardiovascular disease or other conditions that are linked to diabetes. the -- he spent a good amount of time talking about some of the problems that we've encountered with respect to these populations, lack of care coordination. lack of use of interventions that we know work. he mentioned the diabetes prevention program, and the substantial evidence we have that a loss of 5% to 7% of body weight can halt progression of pre-diabetes to diabetes, really, as he said, should be a rather low-cost intervention that could be rolled out rather broadly. that, plus care coordination in many respects, he mentioned, as a real force that could arrest some of the health spending growth that has been attributed to those causes. we then heard from our reactors in sequence. mele bella first talking about the duels, the dual eligibles
who are her purview for the moster children of this mix of chronic disease, technology and cost. and we heard about a number of the pilots that cms has under way now to look for ways to improve the care of those individuals, decrease the churn back and forth between hospitals and nursing homes, et cetera, and reduce rate of costs there. we heard from joe newhouse that the problem of rising growth in health spending, those growth rates is really a problem that is ubiquitous across the world. and not withstanding the fact that the u.s. has a higher level, the real issue that these other countries, the real issue is this rate of growth of cost. however as he mentioned nothing grows to the sky. i was reminded of herb stein's comment that things that cannot go on forever will stop. and you mentioned that we are broadly going to halt the dramatic rates of growth in
health spending. you just don't know exactly how. we'd love to hear you perhaps address maybe whether we are in the midst of that stopping now with consumer directed health plans and high deductible health plans and people not being able to afford care and all of the other things that we know are a factor currently. we heard from jim fasulas of the american college of cardiology about the beneficial aspects, really, of a lot of the technology that we have adopted with respect to cardiovascular disease. particularly as evident in the 30% reduction in mar talty from cardiovascular disease just in the last decade. nonetheless, as he pointed out, there are things going on in cardiovascular care that shouldn't be done, or done excessively, that led to the recommendations as part of the choosing wisely campaign. the five interventions, not to allow your physician to suggest that you have. and as he noted, that coupled
with a lot of quality improvement, efforts under way at various institutions, where improving the quality of cardiovascular care and perhaps reducing some of the unnecessary care driven by certain technologies. we heard from diane rowland about the very important fact that the high spenders in the medicare program are different from the high spenders in the medicaid program. which is a recipe for us developing a much more nuanced understanding about how to restrain excess costs in those two pockets of the population. we heard from bruce chernof, again, much on that same theme that half of the medicare enrollees with chronic conditions also have functional limitations, and half of them are dual eligibles but half are not. and we have to be very mindful, he said, of the problem that we're trying to solve. the problem as many patients see it, is that they lack all of those words that he put up in
his wonderful word cloud. they're not spending a lot of time thinking about how to get access to surgical robots, they're spending more time thinking about how to have a independent, dignified existence, independent of as many health care providers as possible, very often. then we heard from susan reinhard that patients and care givers sense that a lot of the issues that they face in health care is due to factors such as poor communication, they don't feel that they are empowered sufficiently often to make decisions with their health care providers. they're also clearly lacking in health literacy, as she gave a number of examples underscoring that. and that they, too, would very much like to engage in much more constructive dialogue with their health care providers about how to have the care systems that they really want, and that deliver on some of those wonderful words that bruce
mentioned in his word cloud. so with that, the floor is open now for greater discussion about how we move forward, knit some of these issues together, and continue to work on actionable solutions to press forward. joe, did you want to answer the question i just briefly tossed out at you before we get going? >> sure. well, i would distinguish again between the level of costs, and the growth rate of costs, or the phrase that was fashionable awhile back but i haven't heard a lot lately, bend the curve. on growth rates. so, there's a lot of evidence that high er health plans will reduce the level. there's not much evidence, if any, about growth rates.
there's some evidence that the supply side interventions we're throwing out there will affect levels. they could affect growth rates. i could make a theoretical case they will. i don't think there's much evidence on that. so, i don't want to make that sound terribly negative, because at a minimum, even if one just changes the level, it buys time. and frees up resources for other activities. but, since i think the growth rate is the issue, exactly how to attack the growth rate i think we're still doing a lot of trial and error. >> okay. >> that will be fodder for future. >> yes, indeed. david. >> just, sort of follow up on your question to joe, i mean i do think that understanding the differences between society it's really interesting to know that we have far and away the highest
actual level, but a growth ray that's similar to other societies. but in terms of a policy prescription i'm not sure that there's quite as clear a dichotomy. if you can knock one% off a level, for example, by reducing chronic disease or improving care coordination for the next 20 years, you know, 1% a year, then you've cut the growth rate essentially 1% for the next 20 years, as well. so i'm not sure that from a policy point of view, that distinction is as entirely important as it may be in terms of a scientific or understanding the difference at this point of view. >> i agree with that. that's what i meant by buying time when i said i agreed with the prescriptions that ken had put out about interventions. it's certainly worthwhile. but, i think it's a -- the framework is to think about what interventions would change the rate of growth. it's not really something that -- advice not to do something that we know will change the level.
>> corey from the american academy of actuaries. so, we talked a little bit about this last month when we held this and this was something we actually talked about in our medical technical panel meetings, this level versus growth issue and we might be asking too much to say that something has a permanent long-term reduction in growth, and thinking more along the lines of, well, there's going to be a series of shorter-term reductions that then taken together will bend the curve. so, you know, thinking about, you know, we can't expect one thing to have a term long-term, you know, change in things. and so, how do we think about constantly evolving, and moving forward with new changes over time?
>> thank you. >> let me go a little further than david and corey just went. i'm not sure there's really a real distinction at all between level and growth rate. because to say there is means there's some kind of mechanism that generates a growth rate in health spending. and i'm not sure there is. i think a growth in health spending just means a change in the level from one year to the next. so if you go back to what don burrwick's been talking about lately, these wedges, then what you get, what increases health spending is a bunch of decisions that are made every day and then they get made again the next day, and the next day, and the next day. so there's not really a process that you can identify to kind of target the growth rate separately from the level of health spending. you need to look at the level of
health spending, and address what's in there that you can then kind of not have more of unnecessarily. so, i'm not sure that it leads us to a productive set of policies to try to separate those two things too much. >> actually i think there are mechanisms, but the point i think the reason to distinguish level and growth is that once you've gotten out inefficiencies and waste, you've done it. then you're back with some steady state rate of growth. so yes, to david's point and to your point, i could save 1% a year. but for example i could do that by raising a deductible. but at some point it gets ridiculous. it doesn't serve the purpose of risk sharing. or i could do it by putting more risk on providers, but once i've got a maximal risk on providers, i've done that.
the two colleagues -- my two colleagues at cms and i published a piece that's in your book on mechanisms to go to stewart's point on mechanisms, and we talked about income changes over time. which are certainly common across the developed countries. and we, this goes partly to joe antos' talk, we thought that accounted for 29% to 43% of the change in growth. and we thought that interacted with technology, again, to go to joe antos' point about interaction was another 27% to 49%. the insurance changes mattered less. i do think there's some in our data. we're looking now across the oacd and the demographic changes matter just a little bit. so, it -- and now chronic diseases, to go to ken's point, are also increasing, i think, throughout the developed world. certainly diabetes is increasing
throughout so that in, i think, going forward, that's also going to be driving cost, as i said. but again i think all of these things are different aspects of the same reality. and i do think there is a mechanism that's driving the growth rates. >> i think dallas had a hand up. >> testing. quick follow-on on that set of points is, in work that paul has been doing with the database that we now have that has seven years of data pre-and post-design change by a major employ employer, this goes both to joe's point that it makes sense, and jo antos' point that this is where there is some end quote freedom of i